Refinanced and then closed the sale of FSRU Golar Tundra to Golar Partners releasing an incremental $102.8 million of liquidity.

Subsequent events

� Closed Golar Power transaction and received $103.0 million in new liquidity. Debt and operating cash burn in respect of two vessels together with $216.5 million of unfunded capital commitments for the FSRU new-build removed from Golar’s balance sheet.

� Golar and Schlumberger formed OneLNG, a joint venture that will offer an integrated upstream and midstream solution for development of low cost gas reserves to LNG.

� Shipping market commences its recovery with improving utilisation, rates and the re-appearance of round-trip economics.

Golar reported today a 2Q operating loss of $37.1 million as compared to a loss of $42.7 million in 1Q 2016. Although headline shipping rates remained relatively unchanged during the quarter there was a modest improvement in utilisation which increased from 24% in 1Q to 31% in 2Q. Reflecting the uptick in utilisation, total operating revenues increased from $16.6 million in 1Q to $18.4 million in 2Q.

Voyage, charter-hire and commission expenses including those from the Cool Pool collaboration increased from $11.1 million in 1Q to $12.2 million this quarter largely due to the cost of positioning the Golar Tundra from Singapore to Ghana and the two carriers formerly chartered by Nigeria LNG into the Cool Pool. As in the first quarter, included in voyage, charter-hire and commission expenses is $5.8 million in respect of the cost of chartering the Golar Grand.

Vessel operating expenses decreased $1.5 million to $14.1 million. Operating costs for the Golar Arctic normalised in 2Q having been unusually high in the prior quarter when additional storing-up and maintenance costs were incurred in preparation for the vessels two year charter off Jamaica. Savings were also recorded across most of the remaining vessels as a result of a general cost reduction exercise. Administration costs at $9.7 million were $1.9 million lower than 1Q 2016 largely due to a normalisation in project support service costs.

In 2Q the Company generated a net loss of $99.5 million. Notable contributors to this are summarised as follows:

2Q interest expense at $13.3 million has increased from the prior quarters $6.0 million. The increase is largely due to a substantial reduction this quarter in capitalised interest (a credit to interest expense) in respect of assets under development. The credit in the first quarter included a catch-up element for prior quarters. This capitalised interest credit should now be at normalised levels.

Other Financial Items at $27.5 million for 2Q were in line overall with the prior quarter cost of $28.9 million. A 2Q mark to market loss representing the decrease in Golar’s share price from $17.97 on March 31 to $15.50 on June 30 of $7.8 million was recorded against the Company’s Total Return Equity Swap. Mark-to-market losses on the valuation of interest rate swaps amounted to $5.9 million in 2Q following further decreases in long-term swap rates. Amortisation of debt related expenses increased from $4.4 million in 1Q to $11.1 million in 2Q following a change in amortisation method.

Despite a 67% increase in Golar Partners reported net income after non-controlling interests, Golar Partners overall contribution to equity in net losses of affiliates increased by $11.7 million compared to 1Q. This follows a one-off non-cash charge of $19.2 million recorded at the end of the subordination period when the Company’s 15.9 million subordinated units in Golar Partners converted into common units. Cash flows however remain unchanged. In line with 1Q, the Company has received $13.2 million in cash distributions in respect of its investment in Golar Partners.

Commercial Review

Existing Assets and Contracts

LNG Shipping

The modest increase in utilisation in 2Q from historically low levels in 1Q is underpinned by a much greater increase in activity. During 2Q 22 spot voyages were concluded by the Cool Pool relative to only 8 commencing in 1Q. Much of this additional activity was initially supported by an ENARSA tender for 35 cargoes into Argentina early in the quarter followed by tenders for additional cargoes into Egypt. It was activity in the Atlantic basin where structural availability is less than the Pacific or Middle East that drove this improvement in utilisation. Despite the increase in activity, hire rates throughout 2Q remained low at $30kp/day for TFDE tonnage and sub $20kp/day for modern steam vessels. Compensation for backhaul legs was only available in isolated cases.

Subsequent to the quarter end, chartering activity and LNG charter rates have climbed steeply. This improvement cannot be explained by seasonal fluctuations alone. A combination of ramped up production from new facilities that started producing in late 2015/early 2016, the withdrawal of spot traded ships in anticipation of the imminent start-up of their dedicated project volumes and more trading activity to service recently installed FSRU capacity have collectively started to absorb some of the excess spot tonnage. The delayed Gorgon and Angola export projects that weighed heavily on the 1H shipping market are also now starting up and will be accompanied by Sabine Pass’ Train 2 shortly.

The Company believes that sentiment is shifting and owners are cautiously confident in the market over the next 12-24 months. The volume of voyage charters concluded since 2Q, their headline rates and the re-emergence of full round trip economics indicates that the anticipated 2H recovery in the shipping market is finally materialising as expected. Round-trip voyages are currently being concluded at rates exceeding $40k/day out of the Atlantic. Rates in the Pacific have strengthened but not to the same extent with voyages typically being fixed in the mid-$30k/day range. There are however certain additional reserves in the fleet should maximum steaming speeds be reintroduced.

Enquiries from traders and energy majors for 3-6-12 month charters accompanied by extension options have increased notably. Discipline among ship owners is also a welcome sight. Only 4 LNG carriers have been ordered this year to date with conventional carriers on order currently representing 31% of the current fleet. Approximately 130 million tonnes of new production equivalent to 49% of current LNG production is expected to deliver between now and 2020. Golar expects further opportunities to emerge over the coming quarters as cargo owners, mindful of the tightening market seek to secure their shipping at sensible rates.

FSRUs

Golar’s existing fleet of six operating FSRUs, all of which reside within Golar Partners but are managed by the Company, have maintained operational excellence achieving 100% availability during scheduled 2Q operations.

The Golar Tundra arrived off the coast of Ghana at the end of May and issued its notice of readiness the following month. Amounts due under the contract started to accrue from mid-July. Charterers of the FSRU, West Africa Gas Limited (“WAGL”) have however experienced significant delays with respect to the part of the project for which they are responsible. Golar Partners who own the FSRU Tundra are however entitled to payment of hire and invoices have been issued for this.

Although Golar continues to receive assurances that the project remains intact, the Company has sought and received a positive opinion which strongly supports its legal position in exercising its rights under the contract should WAGL contest their obligations under the charter. Golar maintains a constructive dialogue with WAGL with regards to finding a mutually agreeable way forward for the project which is both needed and supported by the government of Ghana. The market generally for FSRUs remains positive as noted further below.

FLNG

The FLNG Hilli conversion project remains on schedule and within budget. Up to 3,000 contractors are working on the vessel during the day with a night shift of 300 also now on-board. FLNG Hilli is currently on track to deliver within its stipulated delivery window. In light of the suspension of Engie’s proposed land based LNG project and discussions with our partners in Cameroon, local authorities and key stakeholders, Golar is cautiously optimistic that increased utilisation of the FLNG Hilli can be achieved after production start-up. Assuming this occurs and depending on the incremental uplift in volumes, this will significantly improve the EBITDA. Based on the configuration of the vessel this additional EBITDA could be achieved for little or no additional investment by Golar.

Ophir and Golar continue to explore ways to develop the Fortuna reserves. Projected economics even at current gas forward prices are strong and the combined upstream and midstream investment required to complete the development should be manageable and financeable.

The biggest challenge for the project is to secure alignment between the upstream and midstream partners. Proper alignment should help secure attractive financing for the entire project. Good progress has been made on both fronts in the last quarter.

Business Development Review

FSRU activities

Over recent quarters Golar has seen a number of companies express a desire to enter the FSRU space. Although they have been attracted by the strong underlying prospects, superior returns and increasing opportunities relative to conventional shipping, many of them lack the technical capability required to replicate Golar’s own successful conversion model or do not have the risk appetite to speculatively order a new-build. A select few will however succeed and this has the potential to put pressure on margins where competitive tenders arise. As previously communicated the company has also noted over time that a large proportion of FSRU projects are being used to directly support power projects. In many cases these power projects enjoy returns well in excess of those achieved by the established FSRU infrastructure providers.

On June 20 Golar entered into a 50/50 joint venture with Stonepeak. This venture, Golar Power, combines the Independent Power Project experience of Stonepeak with the terminal and FSRU experience of Golar and will offer integrated LNG based downstream solutions through the ownership and operation of FSRUs and associated terminal and power generation infrastructure. At closing on July 6 Golar Power assumed from Golar two new-build carrier conversion candidates, the 2017 delivering FSRU new-build and Golar’s right to participate in Brazil’s Sergipe power project. Golar Power is now pursuing both standalone FSRU opportunities and integrated LNG/FSRU supported power projects and is working on several opportunities which have the potential to be awarded over the next year. The Sergipe project is now entering the final stages of its pre Final Investment Decision (“FID”) process. This is a large project with equally large returns but also risks that must be managed. The recent strengthening of the Brazilian Reais against the US Dollar further improves forecasted project economics and solid progress is being made toward FID in the coming months.

FLNG – Business Development Progress

Subsequent to the quarter end, Golar and Schlumberger formalised plans to co-operate on the global development of greenfield, brownfield and stranded gas reserves. On July 25 the two parties established OneLNG, a joint venture 51% owned by Golar that will develop low cost gas reserves to LNG. The combination of Schlumberger’s reservoir knowledge, wellbore technologies and production management capabilities with our own low cost FLNG solution will offer gas resource owners a faster and lower cost development solution. By presenting a united one-stop upstream and midstream solution, OneLNG reduces the number of competing interests in what can be a complicated set of negotiations and also increases the number of financing options available. Golar believes that this will materially improve the likelihood of a project succeeding.

OneLNG was established with $20 million of working capital ($10.2 million funded by Golar) and a commitment to contribute a further $250 million each upon approval of the first project.

A separate OneLNG organisation including a recruited CEO and CFO will be established in due course. The initial working capital will fund employment costs for those initially seconded and recruited into the JV as well as the cost of commissioning extensive research into potential fields and bringing the first project to a final investment decision. To this end, OneLNG is now reviewing in detail a comprehensive list of projects that suit its offering. Whilst there remains a West African bias to the current shortlist it also includes projects in Asia that Golar had not previously contemplated.

Although the cost of feed gas to North American export projects is significantly higher than West African gas today, there are also a number of opportunities in this region that have the potential to be interesting medium term prospects. These prospects would also represent an opportunity to diversify the FLNG portfolio of opportunities from both a gas source (onshore/offshore) and a geographic perspective.

Financing Review

FSRU Tundra dropdown

On May 23 the sale of Golar Tundra to Golar Partners was completed. Proceeds from an additional drawdown against the vessels existing debt facility together with a balancing payment from Golar Partners collectively added an incremental $102.8 million liquidity to Golar’s 2Q balance sheet. The Company will however continue to consolidate the company that owns the Golar Tundra until operations under the contract with West Africa Gas Limited commence. Included in the contract is a one year put to Golar in the event that operations do not commence in accordance with contractual arrangements or no satisfactory mitigating arrangement is agreed.

FLNG financing

As at June 30, 2016, $588 million has been spent on the FLNG Hilli conversion ($619 million including the vessel). To date, Golar has drawn down $150 million against the $960 million CSSCL FLNG Hilli facility. As the project remains well within its $1.2 billion budget, all remaining conversion and site specific costs for the FLNG Hilli are expected to be satisfied by this facility. Given that Golar have already invested $400 million in the conversion of FLNG Hilli, and once the $960 million debt facility is fully drawn, an equity release of up to $160 million is expected.

Golar Power

As well as having strategic merit, the formation and subsequent sale to Stonepeak of a 50% interest in Golar Power represents an important first step in the strengthening of Golar’s financial position. Together with the addition of $103.0 million in new liquidity to the 3Q balance sheet this transaction removed Golar’s obligations to meet the remaining $216.5 million of instalment payments due to Samsung in respect of the 2017 delivering FSRU new-build and substantially reduced the equity call on Golar should the Sergipe project proceed as planned. Golar has also been relieved of the daily operating and debt service costs in respect of the two carriers, equivalent to approximately $50k/day each. Finally, in addition to paying Golar $103.0 million (net of a $10 million working capital contribution to Golar Power), Stonepeak have also subscribed to a further $100 million of preference shares in Golar Power. This, together with an additional $75 million funding commitment from Golar in the period before 2H 2018 provides Golar Power with the capital it needs to sustain its asset base, pursue FSRU and other independent power projects, and, when combined with reasonable debt assumptions, convert both of its carriers into FSRUs.

Liquidity

Golar’s total cash position as at June 30 was $464.4 million. Of this $280.0 million and $85.9 million respectively is restricted cash relating to the FLNG Hilli Letter of Credit (“LC”) and the Company’s total return swap. A further $37.9 million invested in the FLNG Hilli during 2Q will be drawable against the CSSCL debt facility in 3Q.

Since the end of June, the Company’s cash position has been improved by the closing of the Golar Power joint venture with Stonepeak. This transaction produced a $103.0 million net cash addition to Golar. After another bank syndication exercise and a reduction in mark-to-market swaps a further $13.9 million of the $280 million cash backed LC to Perenco has also been released to Golar. Restricted cash tied up in this LC now stands at $266.1 million. Efforts continue to be directed to the release of a further $31 million of this restricted cash over the next few months.

The next step to a strengthened balance sheet requires that Golar address its March 2017 maturing $250 million convertible bond. This bond is secured by shares in Golar Partners currently worth approximately $240 million. Over and above the units used to secure the bond, Golar also has ordinary units in the Partnership worth approximately $90 million and 100% of the General Partner, all of which are unencumbered.

Golar has also initiated discussions with commercial banks. The objective of these discussions is to refinance a material share of the outstanding convertible bond with a medium term commercial bank line secured by Golar’s stake in the Partnership. This could be supplemented by the monetisation of dividends associated with the incentive distribution rights which currently generate $8.6 million in annual distributions. Such an arrangement could also enhance the Partnerships ability to make accretive investments in the future. Several proposals have been received and the Board is confident that a suitable commercial solution can be agreed.

Corporate and other matters

As at June 30, 2016, there were 93.1 million Golar shares outstanding including 3.0 million Total Return Swap shares that have an average price of $41.10 per share. There were also 2.4 million outstanding stock options in issue with an average strike price of approximately $51.92 per share.

The Board has left the dividend unchanged at $0.05 per share for the quarter.

Outlook

Golar has delivered on two significant commitments since last reporting and changed the structure of the company as a result. Golar Power is now an independent downstream entity that is working to build the skills required to embed its FSRUs directly into power projects thus sidestepping the risk of slowly becoming an undifferentiated supplier to what will eventually become a more commoditised business. At the other end of the value chain is OneLNG, a combination with Schlumberger that now has the skills and financing clout required to deliver some of the lowest cost integrated upstream gas to LNG solutions in the market today. In between the two is Golar LNG with its shipping portfolio and technical project development capabilities that will ultimately be the link between these ventures. The shipping business shows signs of an anticipated recovery. Improving utilisation, rates and the re-emergence of full round trip economics should all help to reduce the cash burn associated with this business from 3Q forward. Golar LNG will retain the FLNG Hilli which remains well within budget and on track to deliver off the coast of Cameroon within its contracted delivery window. Discussions regarding utilisation of the vessels spare capacity also represent grounds for cautious optimism.

There are near-term concerns with the status of the FSRU Tundra contract in Ghana that need to be addressed. The commercial rational remains sound and the rhetoric from government and charterers is supportive however the pace of progress on the ground is not yet reflective of this.

At a macro level the last 18 months have been overshadowed by the conventional wisdom that China was no longer in a position to be the LNG demand engine that was the foundation for the wave of new supply that is now starting to deliver. Adding to the pessimism has been the reduced demand from mainstay markets Japan and South Korea. As with the shipping business we are now starting to see signs of new demand. Although traditional demand centres Japan and South Korea have indeed reported recent reductions in LNG imports, China and India have seen imports increase dramatically over recent months. The delinking of LNG prices from oil prices and the reduction of China’s LNG gate price is being met by a demand response. In the case of China there is scope for the gate price to reduce further and this should stimulate additional demand. India is also a price sensitive market that is now responding accordingly both with demand for LNG and also for FSRUs. This together with new demand in the Middle East should be welcome news for LNG players and it is for Golar. The Company does however firmly retain the view that conventional approaches to executing LNG projects still look unlikely to cost effectively deliver new supply in the future. This fact underpins Golar’s belief in the viability of its flexible and low cost OneLNG FLNG offering.

The Board is of the opinion that good progress has been made strategically and financially over the last year to better position the company for the future.